UN announces new CEO alliance to fund sustainability

17 April 2019

A new global CEO alliance will provide the impetus - and money - needed to help finance the Sustainable Development Goals with crucial private capital.

On an average day, it’s impossible to set goals and achieve them without investment, be that in terms of time, money or both.

So how about  setting the most ambitious goals the world’s ever seen and then including a countdown timer that indicates that if you don’t meet them, the global climate will be irrevocably altered, and with it, human life.

FFD Forum 2019

The United Nations Sustainable Development Goals (SDGs) are an ambition for a more sustainable future that ends poverty and builds a better world – and they need investment to work.

The financing gap is astounding. The SDGs are global, but UNCTAD estimates the shortfall in financing to achieve them at $2.5 trillion per year in developing countries alone.

Since the United Nations believes sustainable development is everyone’s business – and in the face of a 2030 deadline to meet the SDGs – it has moved to include those in business in the drive to fund and fulfil the global goals. 

It announced the Global Investors for Sustainable Development (GISD), a new alliance of chief executives coordinated by UNCTAD and the UN’s Department of Economic and Social Affairs (UN DESA), at the UN’s SDG Investment Fair in New York on April 15.

 “We are all aware of the significant funding gap in reaching the SDGs. But we must also be aware that this pales in comparison to the more than $200 trillion of global assets under management,” said Scott Mather, chief investment officer of investment management firm PIMCO, and a founding member of the GISD.

“In other words, there is plenty of capital—both private and public—we just need to direct it in ways that deliver sustainability outcomes.”

The alliance, announced by UN Secretary-General António Guterres, will comprise between 25 and 30 CEOs who will focus on incentivizing larger amounts of long-term investment for sustainable development.

“There is in my view, no SDG which an exchange cannot in someway help achieve,” said Nicky Newton-King, CEO of the Johannesburg Stock Exchange, in her remarks to the UN Secretary-General and other gathered dignitaries.

“The speed of achieving the SDGs is about how we will lead – that is a challenge we should all own.”

The alliance will also include members of existing United Nations networks such as the signatories of the Global Compact, Principles for Responsible Investment, UNEP Finance Initiative and the Sustainable Stock Exchanges Initiative.

The inaugural meeting of the GISD will be held alongside Mr. Guterres’ Climate Action Summit on 23 September this year.

Toward investment

While public financing remains critical, private sources of investment are essential to meet the scale required, the gathering heard.

“We need to move from filling the SDG investment gap to seeing the SDGs as an investment opportunity. That shift is critical for changing business models,” said Navid Hanif, director of UN DESA’s Financing for Sustainable Development Office.

Understanding the scale of the gap is crucial and UNCTAD has been working on this important accounting and measurement.

The 2014 UNCTAD World Investment Report identified an investment gap of several trillion dollars that would need to be filled annually to achieve the goals.

Investment needs in developing countries alone range from $3.3 trillion to $4.5 trillion per year, mainly for basic infrastructure, food security, climate change mitigation and adaptation, health, and education.

The report says the SDG financing gap in developing countries alone is at $2.5 trillion per year.

“Since the launch of the SDGs we have been convening corporate leaders and government policy makers as part of our broad portfolio of activities aimed at finding new solutions and new partnerships to promote investment in sustainable development,” said James Zhan, UNCTAD’s investment and enterprise director, referencing UNCTAD’s biennial World Investment Forum as an example.

“We are happy to be working with DESA and our other UN partners in further this investor-policymaker dialogue to find new mechanisms to finance SDG related sectors.”

Over three days in New York, the SDG Investment Fair convened government policy makers and corporate leaders in a dynamic setting to discuss specific investment opportunities and critical policies and regulations that support closing the SDG investment gap.

The 2019 fair took place alongside the ECOSOC Forum on Financing for Development.

Key SDG Investment Fair partners included the: Global Compact, PRI, UNEP-FI, UNDP, UNIDO, FAO, IFAD, ILO, UN Foundation, ITU, UNCDF, UN Office for Partnerships, ICC, IFC, and the Global Partnerships Forum.

The SDGs, a set of international commitments to end poverty and build a better world by 2030, were adopted by the United Nations General Assembly in 2015.

Meeting space

The interactive space created by the SDG Investment Fair allows participants to discover possibilities for investment to help meet the SDGs.

It also helps connect governments and the private sector and facilitates exchanges on country experiences and the work of international actors.

Several developing countries and organizations presented their approaches to sustainable development, for example:

  • Indonesia presented its sustainable infrastructure partnerships.
  • Burkina Faso provided examples of people-first public-private partnerships.
  • Vincent and the Grenadines shared experience in investing in projects to improve the conditions of the poor and most vulnerable.
  • Swedish Investors for Sustainable Development, representing 18 Swedish financial actors, presented on how they have been working jointly to invest in the SDGs.
  • The International Finance Corporation shared how they support the development of bankable SDG projects.